HOUSE OF LORDS

OPINIONS OF THE LORDS OF APPEAL FOR JUDGMENT

IN THE CAUSE

REGINA

v.

Secretary of State for the Environment, Transport and the Regions

(APPELLANT) and others

ex parte O'Byrne

(RESPONDENT)

ON 14 NOVEMBER 2002

[2002] UKHL 45

LORD BINGHAM OF CORNHILL

My Lords,

1. These proceedings concern the interrelationship between section 5 of the Green Belt (London and Home Counties) Act 1938, which subjects the alienation of Green Belt land as there defined to a condition of ministerial consent, and Part V of the Housing Act 1985, which (consolidating provisions first enacted in 1980) gives qualifying secure tenants a right to acquire the freehold or a lease of their dwelling-house without any requirement of ministerial consent. The problem is one of statutory construction. For the Secretary of State it is argued that Parliament intended section 5 of the 1938 Act to operate even in a case to which Part V of the 1985 Act is applicable. For the tenant it is argued that Parliament intended the Part V regime to apply in cases falling within its provisions irrespective of the terms of section 5. The Court of Appeal (Thorpe, Buxton and Laws LJJ), by a majority (Buxton LJ dissenting), found for the tenant, and the Secretary of State appeals.

2. I am indebted to my noble and learned friend Lord Scott of Foscote for summarising the legislative and factual basis of this appeal, which I need not repeat. I am in full agreement with his conclusions.

3. The issue of construction before the House cannot be resolved by resort to drafting conventions. On the Secretary of State's construction one might have expected to find in the 1985 Act a stipulation that nothing in Part V should affect the operation of section 5 of the 1938 Act. On the tenant's construction one might have expected a provision similar in effect to that found in section 109(2) of the Housing Act 1988 as originally enacted:

"Nothing in section 5 of the Green Belt (London and Home Counties) Act 1938 (restrictions on alienation of land by local authorities) applies in relation to a disposal of land included in an acquisition under this Part."

As it is, the 1985 Act makes no reference at all to the 1938 Act. Thus the intention of Parliament must be inferred by considering the terms and purposes of both Acts in their respective contexts.

4. Both section 5 and Part V concern the transfer of land by a local authority as owner to a third party for consideration. To that extent they cover the same ground. But only to that extent: the differences between the two regimes are very much more striking and fundamental. The object of the 1938 Act was to preserve open land in and around central London from industrial and building development. To that end, section 5 restrained the disposal of Green Belt land (as defined in the Act) in the ownership of local authorities by imposing a requirement of ministerial consent. It was an environmental measure, seeking to protect and preserve the suburban countryside. The 1985 Act had the quite different object of enabling local authority tenants to become owners (or effective owners) of their own homes, for a variety of social, political and economic reasons.

5. The second difference flows from the first. The 1938 Act was primarily concerned with open, undeveloped areas of land. To the extent that there were buildings on these areas of land, they were incidental and were not the focus of the Act. In contrast, the sole focus of the 1985 Act was on dwelling houses to which any open land (in the form of gardens) was incidental.

6. Section 5 was directed, and in its terms was directed only, to a local authority wishing to sell (or exchange, or appropriate) Green Belt land. Thus it was obliged, among other things, to publicise its proposal and seek the consent of any other local authority which had contributed towards the cost of purchasing the land. If the local authority did not wish to dispose of the land, it did not have to do so, and there would be no proposal to publicise, no consent to seek and no occasion for obtaining ministerial consent. Where a secure tenant, relying on Part V of the 1985 Act, claims to exercise the right to buy, the situation is quite otherwise. If the tenant meets the statutory requirements and none of the statutory exceptions applies, the local authority has no choice but to transfer the relevant interest to the claimant on terms governed by the statute, regardless of whether it wishes to do so or not. Its volition is irrelevant.

7. Thus, whereas section 5 imposed restraints on local authorities wishing to dispose of Green Belt land, Part V conferred on secure tenants seeking to acquire ownership (or effective ownership) of their homes the right to do so. In section 118 of the 1985 Act this was defined as

"the right, in the circumstances and subject to the conditions and exceptions stated in the following provisions of this Part"

to acquire the freehold or be granted a lease of the tenant's dwelling house. This statutory formulation clearly suggested, on its face, that the circumstances in which and the conditions and exceptions subject to which a tenant was entitled to buy were to be found in the 1985 Act itself and not elsewhere. This reading of the section is reflected in Form RTB2 as prescribed in Schedule 2 to the Housing (Right to Buy) (Prescribed Forms) Regulations 1986 (S1 2194/1986) where the following appears:

"NOTE TO TENANT

Your right to buy can only be denied in the circumstances set out in the Housing Act 1985, as amended . . ."

8. In considering the intention of Parliament when passing the 1985 Act, or perhaps more properly the intention of the draftsman in settling its terms, there are three (but only three) hypotheses to be considered: (1) that reference to the 1938 Act was omitted because it was regarded as clear that the 1938 Act would continue to operate, in cases to which it applied, irrespective of the terms of Part V; (2) that reference to the 1938 Act was omitted because it was not in the mind of the draftsman of Part V; (3) that reference to the 1938 Act was omitted because Part V was not seen to encroach upon or conflict with the operation of section 5.

9. I would reject the first hypothesis for two reasons. First, it is the practice of parliamentary draftsmen to show an abundance of caution and to favour the avoidance of doubt. Secondly, had the draftsman conceived that a secure tenant's right to buy could be subject to a condition of ministerial consent under section 5 that right would not have been defined in section 118 in the terms quoted in paragraph 7 above, and provision would have been made for asserting and admitting or denying, and handling, claims to exercise the right to buy where ministerial consent was required. If I concluded (as I do not) that section 5 was intended to operate in cases covered by Part V, I would agree with Buxton LJ that the Part V procedures could be made to work, but the absence of any indication that the procedures were devised to apply to conditional rights fortifies the inference that section 5 was not intended to operate in cases covered by Part V. Had it been so intended, the draftsman would have imposed a duty on a local authority to refer to the Secretary of State a claim to exercise the right to buy made by a tenant whose case fell within section 5.

10. I would also reject the second hypothesis. The Housing Act 1985 was one of three major enactments in which, pursuant to recommendations of the Law Commission (as stated in The Report on the Consolidation of the Housing Acts, Report No144 (Cmnd 9515), 2 May 1985, p 3), it was sought to consolidate for England and Wales the whole of the Housing Acts save for provisions relating to the subject-matter of the Leasehold Reform Act 1967 and the Rent Act 1977. These three enactments were supplemented by a fourth, to which extensive lists of repeals and consequential amendments were scheduled. It seems to me unlikely (although no doubt possible) that in the course of this massive consolidation exercise the 1938 Act was simply overlooked, the more so since the draftsman of the Housing Act 1988 had it in mind (see paragraph 3 above).

11. I would accept the third hypothesis. Reference to the 1938 Act was omitted because an involuntary disposal of housing accommodation by a local authority which would not in itself undermine the beneficial environmental objectives of the 1938 Act was not understood to engage the operation of section 5. This understanding justified the terms used in section 118, which would otherwise have been misleading, and is consistent with the absence in Part V of any recognition that a tenant's exercise of the right to buy might be dependent on obtaining ministerial consent. Parliament rightly regarded the Part V regime as falling out-with the scope of section 5: there was no conflict or inconsistency between the two regimes, and hence there was no need to refer to section 5.

12. For these reasons, and those given by Lord Scott, I would dismiss the appeal and make the declaration which he proposes. I agree with his observations on paragraph 5 of Schedule 5 to the 1985 Act. Since the London Borough of Croydon has not chosen to rely on that provision, and the relevant facts have not been investigated, the possible application of that paragraph must remain speculative. Should the council seek to rely on this paragraph hereafter, the tenant would have strong grounds for contending that the point could and should have been raised at a much earlier stage.

LORD HOPE OF CRAIGHEAD

My Lords,

13. I have had the advantage of reading in draft the speech of my noble and learned friend, Lord Scott of Foscote. I agree with it, and for the reasons which he has given I too would dismiss the appeal and make the declaration which he has proposed.

LORD HUTTON

My Lords,

14. I have had the advantage of reading in draft the speech of my noble and learned friend Lord Scott of Foscote. I agree with it, and for the reasons which he gives I too would dismiss the appeal and make the declaration which he proposes.

LORD SCOTT OF FOSCOTE

My Lords,

The issues

15. The Green Belt (London and Home Counties) Act 1938 ("the 1938 Act") was the first modern legislative attempt to establish a Green Belt around London. The scheme of the 1938 Act was that landowners, both private landowners and local authorities, would designate their land as Green Belt land and subject it to restrictions as to user designed to ensure that it retained its open space character. I will have to explain in more detail the way in which the scheme works but it suffices for the moment to notice that once local authority land has become Green Belt land under the 1938 Act the local authority cannot sell the land without first obtaining the consent of the relevant minister, now the Secretary of State for the Environment, Transport and the Regions (see section 5). The Secretary of State is the appellant on this appeal.

16. Under a deed dated 5 February 1948, the parties to which were the Borough of Croydon ("the council") and the London County Council ("the LCC") Coombe Wood, comprising some nine acres outside Croydon, became Green Belt land under the 1938 Act. The land included a stable block over which was residential accommodation, originally intended, I am sure, for a groom or grooms to live in. Coombe Wood has become a public park, Coombe Wood Park. The stables have become a café for visitors to the park. The residential accommodation above the café has, since 1993 been occupied by Miss O'Byrne, the respondent on this appeal.

17. Miss O'Byrne is a landscape gardener. She entered the employment of the council in that capacity in 1988. In 1993 the council offered her a service tenancy of the Coombe Wood flat "for the better performance of [her] duties as a gardener". She accepted the offer and, with her partner and their child, still lives in the flat. Her service tenancy was not a secure tenancy under the Housing Act 1985 (section 79(2) and para 2(i) of Schedule1).

18. In May 1994 the council engaged a private company, Serco Ltd, to take over the maintenance of the park. Miss O'Byrne's employment contract was transferred to Serco Ltd. She was no longer employed by the council. But she continued living in the flat, under the same tenancy, with the council as her landlord. Her tenancy became, therefore, a secure tenancy under the 1985 Act.

19. The right of public sector tenants to acquire the freehold or a long lease of their homes, the so-called "right to buy", was introduced by the Housing Act 1980 and then incorporated into Part V of the 1985 Act. Miss O'Byrne as a secure tenant with a local authority landlord became, subject to a point arising under para 5 of Schedule 5 to the Act, entitled to the right to buy. The right, in her case, was a right to a long lease of the flat at a low rent and for a discounted premium (see section 118(1)(b) ).

20. Part V of the Act sets out in detail the acquisition procedure that must be followed when a tenant seeks to exercise a section 118 right to buy. It starts with a notice served by the tenant on the landlord under section 122. The notice requires the landlord to admit or deny the tenant's right, and in the latter event to give reasons for the denial.

21. On 6 December 1996 Miss O'Byrne served on the council a section 122 notice claiming the section 118 right to a long lease of the flat. The council, having first denied her right to buy, then admitted her right but at the same time took the point that the flat was part of Green Belt land to which the 1938 Act applied. The council said that it would be necessary for the procedures prescribed by section 5 of the 1938 Act, including the obtaining of the Secretary of State's consent, to be complied with.

22. The council then purported to put in train the section 5 procedures; there was an advertisement of the proposed transaction in the local press, a local inquiry convened by the Secretary of State and, in due course, a recommendation from the inspector who conducted the inquiry that consent to the grant of the "right to buy" long lease to Miss O'Byrne be withheld. The Secretary of State accepted the recommendation and withheld consent. The litigation that has culminated in this appeal to your Lordships' House then ensued.

23. The litigation took the form of a judicial review application by Miss O'Byrne in which she challenged the Secretary of State's decision to withhold consent to her acquisition of the long lease to the flat. She sought an order to quash that decision and sought also a declaration that the 1938 Act did not operate so as to deprive her of her 1985 Act right to buy. The Secretary of State was the respondent to Miss O'Byrne's judicial review application.

24. Your Lordships were told that the council made an application to be joined as an additional respondent and that the joinder application was successful. But, surprisingly, no substantive part has been played by the council in the litigation. Indeed the council's attitude to Miss O'Byrne's attempt to exercise a section 118 right to buy seems to me to have been thoroughly equivocal. First, the council admitted her right to buy and, as Part V of the 1985 Act requires (see section 125), sent her a notice specifying "the price at which, in the council's opinions [she was] entitled to have a long lease granted to [her]". But then, having put in train the procedures required by section 5 of the 1938 Act, the council objected to the proposed transaction, purporting to do so pursuant to section 5 of the 1938 Act, thereby causing the Secretary of State to convene the inquiry. And at the inquiry the council argued against the transaction.

25. The main issue which arises for your Lordships' decision is whether section 5 of the 1938 Act can have any application to a secure tenant's right to buy under Part V of the 1985 Act. Two reasons why it cannot have been put forward.

26. First, there is the question whether section 5, correctly construed, applies only to proposed alienations of Green Belt land which the local authority owner wants to carry out, ie. voluntary alienations, and does not, therefore, apply to proposed alienations brought about by compulsory expropriation provisions. The 1985 Act right to buy procedures, like the enfranchisement procedures under the Leasehold Enfranchisement Act 1967 and under chapter 1 of the Leasehold Reform, Housing and Urban Development Act 1993 and like the right of tenants under chapter 2 of the 1993 Act to a new lease at a discounted premium, are compulsory expropriation procedures.

27. If the right view is that section 5 of the 1938 Act has no application where the local authority owner is not proposing to sell but is required by statute to grant the tenant a freehold or long lease, as the case may be, on compensation terms prescribed by the statute, there is an end of this case.

28. Both the first instance judge, Goldring J, and the Court of Appeal took the view that, as a matter of construction of the 1938 Act, section 5 could not be confined to voluntary alienations.

29. If that is right, and section 5, correctly construed, does apply to land to which the 1985 Act right to buy applies, then the second question arises, namely whether the inconsistency between the section 5 procedures and requirements on the one hand and the right to buy provisions on the other hand requires the conclusion that the 1985 Act has, by necessary implication, pro tanto repealed or disapplied section 5. On this point Goldring J held that section 5 had not been repealed or disapplied and, accordingly, that the right to buy could only be exercised over Green Belt land subject to the 1938 Act where the Secretary of State had given the requisite section 5 consent. In the Court of Appeal Buxton LJ came to the same conclusion but Laws LJ, with whom Thorpe LJ agreed, concluded that the machinery prescribed by the 1985 Act for giving effect to the right to buy could not be operated consistently with the section 5 procedures. He held that the 1938 Act was "pro tanto impliedly repealed by the right to buy legislation".

30. There are other issues between the parties which may arise, depending on the way in which the main issue is decided, but it is convenient to set those aside for later mention if necessary. A decision on the main issue requires a closer examination first of the 1938 Act and then of the right to buy provisions in the 1985 Act.

The 1938 Act

31. Section 3 of the 1938 Act provided for the manner in which a Green Belt around London would be established. Either private owners or local authorities could declare their land to be Green Belt land and enter into restrictive covenants for that purpose (see section 3(a) and (b)). In addition, local authorities were given power to purchase land for the purpose of it becoming Green Belt land or to contribute to the purchase price on the purchase of land for that purpose by some other local authority (section 3(c)). Basic to the scheme was that the Green Belt land, whether privately owned or local authority owned, would be subject to suitable restrictive covenants. And section 10 of the Act imposed restrictions on the erection of buildings on Green Belt land.

32. In the 1948 deed whereby Coombe Wood became Green Belt land, the council, which had purchased the land for £14,000, entered into covenants with the LCC, which had contributed £2,732 to the purchase price. The covenants were restrictive of the use to which Coombe Wood could be put. In particular, there was a covenant

"That the said lands or any part thereof shall not at any time hereafter be used without the written consent of the London Council previously had and obtained for any purpose other than

(a) a public open space within the meaning of the Open Spaces Act 1906 or (b) public walks and pleasure grounds . or (c) . to provide for outdoor games or recreations."

33. There was also a covenant against any building on the land

" . other than a building which is ancillary to the purpose or purposes (authorised as aforesaid) for which the said lands or appropriate part thereof is for the time being used unless the consent of the London Council shall have been first had and obtained."

34. In 1948 there was already at least one building on the land. The building consisted of the stables and residential accommodation to which I have already referred. The stables became a café and the residential accommodation became occupied by Miss O'Byrne who had duties in connection with the management of the park. It is easy to accept that both the café and Miss O'Byrne's occupation can be regarded as reasonably ancillary to the enjoyment of the park by the public and therefore as consistent with the user restriction in the 1948 deed.

35. The enforceability of restrictions such as these against successors in title of the covenantor might have presented some problems under the general law since the restrictions were intended to benefit the public rather than any neighbouring land of the covenanteebut section 22(1) of the 1938 Act provided in terms that covenants by a Green Belt landowner with a local authority could be enforced by the local authority against the covenantor and any successors in title (section 22(1)). Moreover section 84 of the Law of Property Act 1925, under which the Lands Tribunal can vary or discharge restrictive covenants on various grounds, was expressly disapplied (section 22(2)). So, initially at least, the Coombe Wood restrictions would have been enforceable by the LCC against the council and any successors in title of the council.

36. In 1963 the functions of the LCC in relation, inter alia, to Coombe Wood became vested in the council. So the odd position was reached, and has since pertained, that the council was both covenantor and covenantee in respect of the restrictions in the 1948 deed. But the status of the land as Green Belt land was not affected and, under section 23 of the 1938 Act

"Any restrictions on Green Belt land by this Act or by any declaration made in manner provided by this Act may be enforced by the minister . "

So there is, I think, no doubt but that the restrictive covenants contained in the 1948 deed have continued to bind Coombe Wood notwithstanding the unity of covenantor and covenantee.

37. The 1938 Act placed no restriction on the freedom of private owners of Green Belt land to dispose of the land. The land would, however, remain subject to the Green Belt user restrictions and building restrictions, assuming no problem arose out of non-registration of the restrictions under the Land Charges Act 1925 or the Land Registration Act 1925 (see section 31 of the 1938 Act). The restrictions would remain enforceable either by the local authority covenantee or by the minister.

38. But the position in relation to Green Belt land owned by a local authority was different. Section 5 of the 1938 Act restricts the power of the local authority to sell it, to exchange it or to appropriate it for use for non-Green Belt purposes. If it wants to do any of these things, the local authority must first advertise its proposal in the local press, seek the consent of the county council in whose area the land is situated and the consent of any local authority that has contributed to the costs of its acquisition ("a contributing local authority") and obtain the consent of the minister. If the county council or a contributing local authority object to the proposal, the minister, before deciding whether or not to consent, must convene a local inquiry. The local authority's proposal, be it for a sale, an exchange of land, or an appropriation for other purposes, cannot be effected unless the minister consents. When consenting, if he does, the minister has power to free the land from all or some of the Green Belt restrictions that bind it. No doubt he would at least free the land from any restrictions that would impede the new use intended for the land.

39. Section 6 of the Act is complementary to section 5. It provides comparable procedure where, instead of the local authority owner of the Green Belt land wanting to sell, some other local authority or statutory undertaker wants to acquire the land compulsorily for its own statutory purposes. Under section 6 the requisite procedure is initiated not by the local authority owner of the land, but by the would-be acquirer of the land. The would-be acquirer cannot put in train compulsory purchase machinery unless and until the consent of the minister has been obtained. And, in giving his consent, if he does, the minister, as under section 5, has power to free the land from its Green Belt restrictions.

40. There are two types of compulsory acquisition which are expressly excepted from the section 6 procedures. First, the section 6 procedures do not apply where the statutory power of acquisition specifically identifies the land to be acquired. Such a statute overrides the section 6 procedures. Secondly, the section 6 procedures do not apply to the compulsory acquisitions referred to in section 8. Section 8 relates to Green Belt land required for highways. Where land is to be compulsorily acquired for highway purposes, the section 6 procedures do not apply and the land is, on possession being taken by the acquiring authority, automatically freed from any Green Belt restrictions (see section 8(3)).

41. It is clear that the compulsory acquisitions dealt with or referred to in section 6 do not include compulsory acquisitions by private individuals who are not statutory undertakers, that is to say

" . any persons authorised by any enactment or by any order rule or regulation made under any enactment to construct work . " etc. (section 2(1))

42. The section 6 procedures do not, therefore, apply to acquisitions under Part V of the 1985 Act. Do the section 5 procedures apply? Section 5 provides, so far as relevant, that

"Subject to the provisions of section 6 of this Act before Green Belt land vested in a local authority is sold or . is exchanged or . is appropriated [for other purposes] . the local authority . in whom the land is vested shall

(a) publish in one or more newspapers circulating in the locality in which the land proposed to be sold is situate a notice of the proposal . specifying . the time . within which and the manner in which objections to such sale exchange or appropriation can be made

(b) serve a copy of such notice on every contributing local authority and on the county council

(c) seek the consent of every contributing local authority and of the county council to such sale exchange or appropriation;

(d) send to the Minister a copy of every such notice and of every consent which has been obtained to such sale exchange or appropriation;

(e) obtain the consent of the Minister.

(2) The Minister before giving his consent under this section shall consider any objections which he has received to the proposed sale exchange or appropriation.

(3) If the consent of any contributing local authority or of the county council is not obtained by the local authority . in whom the land is vested . the Minister shall before consenting to the sale exchange or appropriation cause a local inquiry to be held

(5) An order of the Minister made under this section may contain such terms and conditions (if any) as shall appear to him to be just and where such order is made with reference to the sale or appropriation of Green Belt land may also provide that the land to which the order relates shall as from such date as the Minister may specify be free (to such extent as may be specified in such order) from the restrictions imposed upon it whether by this Act or by any declaration made or covenant entered into in manner provided by and for the purposes of this Act."